Fiscal 2019 will mark the ninth consecutive year of modest state spending and revenue growth, according to governors’ budget proposals — and enacted budgets for some states that budget on a biennial basis and passed two-year budgets in 2017. Compared to this time last year, state fiscal conditions show signs of improvement and greater stability. According to this survey, states are projected to increase general fund spending by 3.2 percent in fiscal 2019; by comparison, last spring, states were expecting an increase of just 1.0 percent based on governors’ fiscal 2018 budgets. ….
Key Report Findings:
• Governors’ budgets for fiscal 2019 recommend general fund spending growth of 3.2 percent, with a median growth rate of 2.7 percent.
• Governors proposed program area spending increases totaling $26.5 billion in fiscal 2019, compared to just $8.7 billion in new spending proposed last year in their fiscal 2018 budgets.
• Revenue conditions have improved in fiscal 2018, and states expect moderate general fund revenue growth to continue in fiscal 2019, with a median growth rate of 2.8 percent.
• Only 9 states reported making mid-year budget cuts totaling $830 million in fiscal 2018, far fewer than last year.
• Governors proposed mostly modest tax and fee changes for fiscal 2019, many of which were in response to the new federal tax law.
• Most states continue to strengthen their rainy day funds, with the median balance as a share of general fund spending rising to 6.2 percent in fiscal 2019.
• Medicaid spending is projected to slow in fiscal 2019, with a median growth rate of 1.9 percent from all funds. ….